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Solar panels on your home or business for absolutely no money. How does that work?

The equation for going solar is getting simpler.Meridian's unilateral decision to cut the amount it pays customers for power going back into the grid may seem a disincentive for local renewable energy.But it's a new calculation when the solar firms own and maintain the equipment and the customer buys the power cheaper than they could get it from the grid.That's the deal Nelson-headquartered solarcity is pushing into the Auckland market as its solarZero package, and other firms are looking at similar offerings.It's a model that has worked with great success for the other Solar City, the United States business with over 40,000 customers.Solarcity (New Zealand) chief executive Andrew Booth says his firm is able to exploit a number of economic advantages, including falling technology costs and the fact generating power from the sunlight falling on your roof is as local as it gets."When Meridian provides power to Auckland from its dams in the South Island, 30 per cent of the power is lost on the way, whereas we have no loses whatsoever."The price our customer pays for power pivots off the price of the technology," he says.Booth says Meridian's existing customers have been besieging solarcity for alternatives since learning the buyback rate dropped by two thirds."I worked out on the back of a fag packet the [Meridian] chief executive is paid more annually that the amount they have to fork out to customers for those small amounts of power they buy."They argue it's about economics, but it's about that they want to regulate solar out of the market because they know it will out-compete them."Booth says solarcity is using the same financing mechanism used to create the hydropower dams to allow ordinary families to put solar on their roof to generate power."We know 85 per cent of New Zealanders want to go solar but the vast majority can't afford to do it because the up-front capital cost is too big."About 100 customers signed up in the first month, and Booth expects demand to grow quickly.To make the shift, solarcity raised $25 million in additional capital from its shareholders, who include investment fund Pencarrow and Stephen Tindall's K1W1."You need to have shareholder backing from individuals and organisations willing to take a long-term view," Booth says.He says established power companies are trying to slow adoption of solar, but it's an unstoppable change."Right now for 75 per cent of all homes in New Zealand we can deliver power up to 30 per cent cheaper than the retailers and that's the rub," he says.Sunergise has also been raising extra capital to fund a lease programme, which it aims at the commercial sector.Co founder Lachlan McPherson says the first phase of solar power, where individuals bought systems, may be on the way out."When you lease you don't need to worry about the technology as it improves, you are not caught in old technology, you are not concerned with maintenance so the decision to go solar is easy - do you choose cheaper power or not?Most of Sunergise's business is done in the Pacific Islands, where it has access to United Nations development funds, but McPherson says directors are committed to the goal of having New Zealand on 100 per cent renewable power by 2025 - the same year we all give up smoking.What they can achieve can be seen from the 60KW system on the Colenso BBDO building at the top of College Hill.McPherson says since it was installed at the end of last year it has saved 60 tonnes of carbon from entering the atmosphere.Systems are sized for daytime use, supplying about half a customer's needs."The reason we don't provide more than 50 per cent is we don't want to be feeding too much back into the grid," he says.That may change once the customer base builds up so it has a large enough amount of power to negotiate a better price.Brendon Winitana from the Sustainable Energy Association says at least three other companies are looking at the rental model."It's about removing a barrier, the up-front capital cost," he says."To do that you have to contemplate the technology, the cost of supply and installation and load in a monthly rate where you buy the power, not the technology. All you need is a defined period to secure the deal."That's bringing solar into line with commercial vehicle fleets and IT hardware and software, where lease deals are the norm. "We are delighted. SEANZ said two years ago finance and funding mechanism will open the doors to many more consumers, residential or business."He says it's ideal for commercial customers because it is an operating expense off the balance sheet, there is no capital tied up and it's tax-deductible.As of August 2014 New Zealand had just over 50 commercial and 3300 residential installations.That's a long way behind Australia, which has passed 1.2 million installations.